2020, the year that was: A gloomy picture for the entertainment industry

Decimation of film business, redrawing of the video map, and possible break-up of big tech firms could be dominant trends in 2021

“Phir se dekhni padegi (will have to see it again),” says some guy. It is impossible to not hear it; there are just six people in the 160-seat auditorium at Cinepolis (Delhi) for Christopher Nolan’s Tenet. The story of an agent who travels back and forth in time messes the mind, like all of Nolan’s films. But what messes it more is the near-empty theatre. After eight months of zero revenues, if this is the occupancy on a Sunday evening, then why bother opening at all? If it continues, it will sound the death knell for the film business, the Gangotri of everything — radio, TV, streaming, music, and even advertising — in India’s Rs 1.82-trillion media and entertainment (M&E) industry. That is the first “trend” for 2021. 

Till a vaccine for Covid-19 reaches a large mass of the 1.3-billion Indians and life comes back to normal, things will remain like that auditorium for Tenet — sad and empty. Watch out then for scores of single-screen theatres and many of the value-for-money multiplex chains in small-town India. They could shut down, like many already have. More than 60 per cent of the Rs 19,100 crore that Indian films made in 2019 came from theatres. While a PVR Cinemas or a Yashraj Films will be able to cope with the Covid-induced situation, India is home to thousands of small producers and distributors who form the robust creative ecosystem that has consistently stood up to Hollywood. It could die. What emerges from the ashes is not clear — but only streaming cannot support the loss of 60 per cent revenues.  

And this brings in the second trend — how video alternatives are reshaping the ecosystem. In just over 25 years, TV reached 836 million Indians and transformed the media landscape. At over 42 per cent of the industry’s revenues, it remains the largest and strongest part of the Indian M&E business. It has been growing on time spent, viewership, and reach. On the other hand, in just over four years, streaming video now reaches 400 million people. It is just about 10 per cent of the revenue and 10-15 per cent of the time of TV. The myth is that streaming on-demand will kill linear TV; the fact is their growth is complementary and co-dependent. 

Some of the biggest streaming players in India come from broadcast firms (Zee5, Disney+Hotstar, Voot). More than 50 per cent of the viewership on streaming video is catch-up TV. “The biggest shows on Star Plus will be the biggest shows on Hotstar. Ditto for Zee5 or Colors. How strong your content is on TV is the defining factor on OTT (over-the-top or streaming),” reckons Kedar Gavane, senior vice-president and head APAC, ComScore. 

Tarun Katial, CEO, Zee5, points out: “Eventually VoD (video-on-demand) will land on (the) TV (screen). The price point of (an internet-enabled) smart TV is down to Rs 7,000. In the next 18-26 months, long-form entertainment will increasingly move to TV,” says he. He points to the US market where the bulk of OTT viewership happens on television. From a few million, smart TV penetration jumped to 20 million of the 197 million TV homes in India in 2020. Much of it was driven by the sampling of OTT content on the big screen during the lockdown. This will only rise. What will emerge is a kind of hybrid combining the strengths of TV and streaming. 

This brings us to the third trend — the possible break-up of big tech firms. The world’s biggest online distribution platforms are owned by a handful of firms each with crazy amounts of reach and revenue: Apple (1.5-billion users, $260-billion revenue), Google (1.7-billion users, 161-billion revenue), Facebook (2.6-billion users, $71-billion revenue), and Amazon ($280-billion revenue). Google and Facebook account for over 56 per cent of all digital advertising in the US and over 70 per cent in India. Newspapers, music firms, broadcasters, and film studios have to agree to their terms or get locked out of the global market — like Fortnite was when Apple threw it out earlier this year. That is why regulators in the US and EU are actively working on figuring out ways to control them — one of these is to break up, say, a Facebook into Instagram, Facebook, and WhatsApp. This could improve competition and ease the pressure that the Google-Facebook duopoly places on the streaming video and digital news markets in India. 

It has been a tough year for everyone. But Indians got their TV, OTT, newspaper, and radio. The Indian M&E industry entertained and informed a home-bound country even while being pummelled by lack of revenues, job losses, and news channels bad-mouthing it. After doing a phenomenal job, it still stares at a 20-30 revenue drop. That is not a great beginning to the new year.